This post is a bit of a rant, and definitely not me revealing something clever or novel. We all know this to be true, but someone apparently needs to say it.

Everyone has a private life. Things they keep from their friends, their family, even their spouse. I won’t go into details here, but use your imagination The thing is, secrets aren’t always bad. Sometimes we need to keep a part of ourselves hidden. It might be because we’re not ready to talk about it, or perhaps because others aren’t ready to hear it. Or maybe we just want something that’s ours, without dealing with everything that comes from sharing it with others.

I’ve been reading a lot of blogs on the subject of social media lately, and I’m getting incredibly tired of hearing about how businesses need to be “transparent”. I’m not sure who started this meme, but it needs to die. In business, as in life, true transparency is bad.

I know, it sounds terrible, like a machiavellian scheme to hoard secrets for the purpose of power, to cover wrongs and sins for the purpose of pride, but bear with me.

Some things should be open to your customers. When you screw up, you should admit it openly and honestly, and what you’re doing to fix it. And it’s a great idea to have conversations with your markets about what their needs are and how you might be able to fulfill them. Most importantly, you should reveal things to your customers that they have a right to know, such as your return policies or how you handle their private data, or whether your product has certain shortcomings. But revealing too much about your business carries enormous risks:

1. It opens you up to liability – The sad truth is that we live in an increasingly litigious society, and even if you’re wrongfully sued and you end up winning, you’ll still spend an enormous amount of time, money, and attention defending yourself. And there are always lowlifes out there looking for reasons to sue, hoping for a quick settlement. Don’t give them more ammunition.

2. It’s highly likely to be misunderstood and damage your brand – This one will probably be controversial, but it’s my belief that customers don’t need (or often want) to know everything. Your strategic plans, financials, and other sensitive data are at best distractions, and at worst can turn customer sentiment against you. What if your product has 70% profit margins? That’s great for you, but a previously satisfied customers may now feel that you’re gouging them.

3. You risk divulging trade secrets to watching competitors – The barriers to entry for many industries keep dropping, making it easier for competitors to enter your market. Why help them out even more by telling them why it’s a great market and how to win in it?

Tell me this, how transparent are Apple, Google, and Microsoft? Do you know all about the inner workings? Do they let anyone in the company speak about anything they want at any time? Do you know what their plans are for the next year? Of course not, and ultimately, most people don’t care. They don’t care because those companies deliver. And that’s the real catch with transparency. The risks are enormous, but the advantages are few. If you deliver a great product or service and good customer experience, your customers won’t care if you’re secretive. But if you deliver crap, no amount of transparency will save you.

A great example of this principle occurred last year where a blogger wrote a post about how the website for American Airlines sucks, and an AA employee was allegedly fired for talking to the blogger about the internals of the company and how they had tried to improve the website, but bureaucracy prevailed. The social media folks generally came down pretty hard on AA for this, which is understandable given the slant of the story, but the reality is that AA has a brand to protect and transparency in this case would do nothing but harm the brand. Yes, their website sucks. But there are three classes of users of that website out there:

a) the ones who like it
b) the ones who hate it
c) the ones who don’t care

By revealing that there are factions inside AA that dislike the site and are trying unsuccessfully to improve the site, what is the effect on those groups? Group A, the satisfied customers, are likely to now be less satisfied. Group B, the ones who hate it, are now probably even more upset at AA because they can’t get their act together. And Group C either still doesn’t care, or now dislikes the site and the company as well because of this fiasco. So AA did the rational thing and fired the guy for breaching his NDA in promotion of transparency.

It may sound like I’m advocating companies firing folks to stay opaque, but that’s not my point. My point is that AA has not delivered a great product, so transparency in this case actually makes the situation *worse*. And if they had delivered a great product, we would never be having this conversation in the first place and no one would care whether they’re transparent or not.

There’s a limit to transparency, and going beyond that limit is incredibly foolish. I think our goal should instead be translucency.

Translucency says that I have enough respect for myself and my customers to know that they (and my competitors) don’t need to know some things.

Translucency is ultimately about having a two-way relationship of trust, where your customers believe that they have the relevant information and that you’re not trying to mislead them. The subtle assumption behind too much transparency is that your brand or company can’t be trusted, so you should reveal everything.

Translucency is about honesty, and having the confidence that your brand represents enough goodwill that your customers will trust that what you’re telling them is what they need to know. That trust is difficult to build and maintain, but worth its weight in gold. Translucency is hard, but sustainable.